Both the hepatitis B virus (HBV) and hepatitis C virus (HCV) continue to cause serious chronic liver disease including hepatocellular carcinoma (HCC) in the United States and in other countries. Increasingly sensitive methods for detecting these viruses have been under review at CBER during the current year. Research on the seroepidemiology of these viruses in serially collected serum samples from Miyazaki, Japan, has continued. Two villages are under study, and a third is in the process of being added. One of the villages has a 23% prevalence rate of HCV infection, and studies conducted this year have shown that the incidence of NEW infections in previously seronegative persons is extremely high, approaching 300/100,000 person-years. Later studies in other villages elsewhere in Japan published by other laboratories have subsequently provided additional support for the concept that pockets of extremely high prevalence of HCV are probably responsible for the high rate of HCV-associated serious liver disease in Japan. This laboratory has been studying the effect of CpG methylation (methylation of cytosine 5'-adjacent to guanosine) of the HBV genes, to determine their role in the virulence of HBV infection and its outcome. CpG methylation is being looked for in the key genes of HBV, including the gene coding for the surface protein (HBsAg) and the core protein (HBcAg), those which form the basis for all of the licensed screening tests applied to whole blood donations at present. To date, serial serum samples from five patients with severe chronic HBV have been studied; CpG methylation was found to be associated with high levels of liver enzymes. Further studies are in progress.